Obama: US, China sailing 'uncharted' cyberwaters

By Julie Pace
Associated Press

Published: Saturday, June 8 2013 12:00 a.m. MDT

President Barack Obama, right, shakes hands with Chinese President Xi Jinping at the Annenberg Retreat at Sunnylands Friday, June 7, 2013, in Rancho Mirage, Calif. Seeking a fresh start to a complex relationship, the leaders are retreating to a sprawling desert estate for two days of talks on high-stakes issues, including cybersecurity and North Korea's nuclear threats. (Evan Vucci, Associated Press)

RANCHO MIRAGE, Calif. — The United States and China are in "uncharted waters" as they tackle the contentious issue of cybersecurity, President Barack Obama said following the opening round of talks with Chinese President Xi Jinping at a summit in the California desert.

Obama and Xi opened their second day of talks Saturday with a staged walk for the press through the grounds of the Sunnylands estate, with Obama telling reporters the meetings have been "terrific." They chatted with each other through interpreters as they walked along a manicured lawn, then over a small bridge. In the spirit of the informal summit, they went without jackets.

The issue of cyberespionage hangs over the summit, although both leaders carefully avoided accusing each other of the practice when talking to the press at the end of their first day of meetings. But they acknowledged an urgent need to find a common approach to addressing the matter.

"We don't have the kind of protocols that have governed military issues and arms issues, where nations have a lot of experience in trying to negotiate what's acceptable and what's not," Obama said during a news conference with Xi late Friday.

The question-and-answer session with reporters was bookended by more than two hours of private talks and a working dinner.

U.S. officials cast the more relaxed California summit as an opportunity for Obama and Xi to hold candid and free-flowing talks on the myriad issues that define the relationship between the two countries, including the economy, climate change and North Korea's nuclear provocations. It was their first meeting since Xi took office in March.

However, it's cybersecurity that has taken on increasing importance to the Obama administration in its recent talks with China.

Because of advances in technology, the issue of cybersecurity and need for rules and common approach for cybersecurity are going to be increasingly important, Obama said.

Obama said it was critical that the U.S. and China reach a "firm understanding" on cyber issues. But he stopped short of accusing China of orchestrating hacking attacks on American government and business computers.

Xi claimed no responsibility for China's alleged actions. He said his nation was also a victim of cyberspying but did not assign any blame.

The discussion on international cyberspying was juxtaposed with new revelations that the Obama administration is collecting data from U.S. phone and Internet companies.

The president pushed back against the notion that the controversy over the widespread government surveillance undercut his credibility to take on China over cybersecurity. He insisted the two issues were separate and said concerns over hacking and intellectual property theft shouldn't be confused with the debate over how governments collect data to combat terrorist threats.

"That's a conversation that I welcome," he said.

China, too, has concerns about cybersecurity, Xi said, calling new technology a "double-edged sword" that can drive progress while causing headaches for governments and their regulators. Although he said China has been victimized by cybercrime, he did not specify who may have perpetrated them.

Speaking more broadly, Xi said he and Obama believe the two countries can approach each other in a way "that is different from the inevitable confrontation and conflict."

The U.S. has started bringing its complaints about persistent Chinese computer-hacking into the open after years of quiet and largely unsuccessful diplomacy. It has accused Beijing's government and military of computer-based attacks against America. While there have been no actual admissions of guilt, Chinese leaders have started acknowledging there is a problem, and U.S. officials say the Chinese seem more open to working with the U.S. to address it.

On the economic front, U.S. manufacturers have long contended that China is manipulating its currency to gain a trade advantage. The U.S. trade deficit with China is the largest with any single nation. The U.S. government, however, has declined to label China a currency manipulator in an effort to narrow the trade deficit through negotiation rather than confrontation.

The two presidents were originally scheduled to hold their first meeting of the year in September, on the sidelines of an economic summit in Russia. But both countries agreed there was a need to hold talks earlier.

U.S. officials see Xi, who took office in March, as a potentially new kind of Chinese leader. He has deeper ties to the U.S. than many of his predecessors and appears more comfortable in public than the last president, Hu Jintao, with whom Obama never developed a strong personal rapport.

As the meetings continue, Obama will also be looking to build on Xi's apparent impatience with North Korea's nuclear provocations. The U.S. has welcomed Xi's recent calls for North Korea to return to nuclear talks, though it's unclear whether Pyongyang is ready to change its behavior.

Xi is likely to press China's claims of business discrimination in U.S. markets and to express concern over Obama's efforts to expand U.S. influence in the Asia-Pacific region, which China sees as an attempt to contain its growing power.